Cocoa processing in North America probably fell during the first quarter amid sluggish economic growth and as more chocolate makers operate plants in African and Asian countries that grow the beans, a survey showed.
In the three months ended March 31, processing, a measure of demand, probably dropped to 118,061 metric tons from 119,022 tons in the same period a year earlier, according to the average of eight analysts surveyed by Bloomberg.
Declining demand in North America reflects the slower “economy and more grinding in other locations, including Ivory Coast and Indonesia,” Sterling Smith, a futures specialist with Citigroup Inc. in Chicago, said in an e-mail.
The U.S. economy, the world’s largest, grew at a 0.4 percent annualized rate in the fourth quarter compared with 4.1 percent a year earlier, Commerce Department data showed.
In Indonesia, the world’s third-largest grower, new plants are being built and existing facilities improved, Zulhefi Sikumbang, the chairman of the Indonesian Cocoa Association, said last month. The country’s capacity expanded after the government taxed bean exports in 2010, he said.
Producing nations, including top grower Ivory Coast, currently process about 43 percent of the world’s beans, according data from the London-based International Cocoa Organization. That will increase to about 50 percent within three years as producers seek to extract more value, the ICO estimated last year.
Global cocoa consumption will expand annually by 3 percent to 3.5 percent in the next five years, driven by emerging markets, according to broker Marex Spectron Group Ltd. With Europe still the leading consumer of chocolate, and Asia showing the best demand-growth rates, the North American figures will have less weigh on futures prices, Jonathan Parkman, the co-head of agriculture at London-based Marex Spectron, said in a telephone interview on April 11.
The National Confectioners Association will release the first quarter data on April 18 in Washington. The report will include figures for Canada, Mexico and the U.S. The Association’s members include Barry Callebaut (BARN) AG, the world’s largest maker of chocolate in bulk, as well as Hershey Co. (HSY) and Mars Inc.
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